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I’m trying to put to use the creative financing techniques we learned last weekend.
I have an opportunity to purchase a double from a long time owner. There is no mortgage on the property.
The owner is older and can’t keep up the property.
The owner wants $110,000 for the property and it needs $30,000 in work. His asking price is about $50,000 above what the market dictates.
We dickered on the price and his mind is set that he needs $110000.
Rents currently total $1100/mth. With the repairs we feel we can get $1300/mth total.
I’m looking for a way for him to provide the financing.
I was going to suggest that he get a loan for the $110,000 and give us $30,000 for the repairs, but the PITI wouldn’t leave us with much cash flow.
I don’t expect any price appreciation for the 3-5 years we expect to hold it before selling.
Your thoughts?
Since he is set on price your ‘knob’ is terms. $500/mo for 220 months is 110K and you can cash flow 800/mo less taxes, insurance, vacancy and maintenance. if we assume 400/mo for that stuff, you net 400/mo assuming you can come in with the repair money. When you are ready to sell, wrap the purchase money mortgage to produce a spread.
When you buy with seller financing, you can pay market or even a LITTLE over IF the terms are really great — but paying $50,000 more than market is stretching it.
You should pass and look for a more motivated seller. This guy will come to his senses one of these days – so follow up with him
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